When your business offers a discount program for customers paying with cash, you might think that this will chase away the customers who pay by credit card. Some might think that a cash discount doesn’t provide much of an incentive for those who don’t carry cash when they go shopping. The truth is, however, that those who pay by credit card are getting their own incentives just by swiping.
Incentives For Cash Payment
A cash discount program can be a great way for merchants to keep their costs low while providing a benefit for those who pay with cash.
When customers pay with a credit card, the merchant must pay a percentage of the sale amount to the credit card processing company (i.e. Visa, MasterCard, and Discover). By offering a discount to customers who elect to pay with cash, it gives customers an incentive to keep their credit card in their wallet and eliminate the credit card processing fees for the merchant.
But where is the incentive for those who want to pay by credit card?
Incentives For Credit Card Use
Those who pay with a credit card might not be eligible for the reduced price of a cash discount, but their benefits come in other ways. First and foremost, the ability to use a credit card for a purchase means that they don’t have to carry high amounts of cash in their wallet. When shopping for high-ticket items, like a new iMac computer, this makes sense for security.
Credit cards also make the transaction quick and easy; just swipe and go.
But the biggest incentive for using a credit card for a purchase comes directly to the customer from the credit card company itself.
Rewards From The Credit Card Companies
Rewards programs have been around for many years, and they can allow users to gain incentives just for making purchases on their card. For each dollar they spend, they can collect and redeem points for various rewards such as:
• Cashback rewards – the user can earn up to 1 percent of the total of each purchase. The more they use, the more money they earn.
• General reward points – as points accumulate through credit card use, the points can be cashed in for various items like gift cards, electronics, hotel stays, pet supplies, and more.
• Hotel and travel points – will allow you to earn points toward free stays at participating hotels and free flights with participating airlines.
• Retail rewards – co-branded with specific retailers (such as Amazon or JC Penney), points are accumulated by making purchases with the retailer. Points can then be redeemed for products or services from the specific retailer.
If shopping in your store can give someone enough reward points for a free flight, that’s all the incentive they need. No matter how customers pay, there’s a little something for everyone.